Alan Evans
Online real estate company Zillow is shutting down its home-buying business and laying off 25% of its workforce after missing third-quarter profit expectations.
The company said in a statement accompanying its earnings report on Tuesday that it was halting its Offers program, which helps people buy and sell homes, after reporting a net loss in part due to failures in the Offers division. Zillow said the change was due to its inability to accurately predict the housing market.
“Home pricing unpredictability has far exceeded our expectations, and we have determined that continuing to expand Zillow Offers would result in too much volatility in our margins and balance sheet,” Zillow Group CEO Rich Barton said in the announcement. “While we built and learned a tremendous amount while operating Zillow Offers, it only served a small portion of our customers.”
As part of the changes, Zillow plans to lay off 25% of its workforce, or about 1,500 people, over the next few months.
“The most difficult aspect of this decision is that it will impact many of our colleagues,” Barton said. “It is not something we take lightly. We appreciate their efforts and are committed to ensuring a smooth transition.”
The company announced the temporary halt to its offers business in October, citing supply chain disruptions and larger economic issues.
“We operate in a labor- and supply-constrained economy in a competitive real estate market, particularly in the areas of construction, renovations and closings,” Zillow Chief Operating Officer Jeremy Waxman said at the time. “We are not immune to these market and capacity challenges and are currently experiencing operational delays in renovations and closings.”
Bloomberg reports that Zillow is looking to sell $2.8 billion worth of real estate inventory, or 7,000 homes, over the next few months.
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